How Are You Protecting Yourself against This Roaring Bull Market..?

It's a figurative way to ask what political,
economic, or market risks worry investors most. The implied question is: How
are you protecting yourself against this roaring bull market?

Equitymaster.com have own
cure for investment-related insomnia.We call it the 70:20:10 rule.

Investors should always have 70% of their corpus invested in
large caps, 20% in mid caps, and 10% small caps.

Those with more risk appetite can have a slightly different
allocation, but this is sufficient to not only earn good long-term returns from
stocks but also limit downside risk.

In our view, it's simply the best protection you can have
irrespective of the market environment. In fact, this is the third layer of
protection we recommend. Long-term readers already know the other two: Invest
in businesses with sound fundamentals and buy at valuations with sufficient
margin of safety.

We aren't of the conventional view that, just because an
asset class is volatile, it's also risky. This line of thinking can cause a lot
of damage to long-term returns. It tends to keep people away from stocks and
not benefit from their enormous long-term wealth-building potential.

Now, we are not saying equities are not risky. They are. But
without question, they should be a significant part of your long-term plan. The
real risk you should be worried about is the risk of a permanent loss of
capital. And the real question is how to minimise that risk.

The three-layer protection is one of the most effective ways.
The large caps provide much-needed stability and resilience to your portfolio,
while the mid and small caps add that extra zing to your overall returns.

Do this and you'll have positioned yourself superbly to
benefit from the long-term India growth story without exposing yourself to a
lot of risk.

It is simply one of the best all-weather protection plans you
can get, and we just made employing it extremely easy.

How Are You Protecting Yourself against This Roaring Bull Market..?
Reviewed by S. Chitra
on
May 02, 2017
Rating: 5 How Are You Protecting Yourself against This Roaring Bull Market..? By Mr. Rahul Shah, Co - Head of Research, Equity Master It's a...